2018 is almost here and for many of us a new year represents a new start. A chance to really commit to giving something a red hot go. Most New Year’s resolutions involve losing weight, maintaining a healthier lifestyle, living life to its fullest and spending more time with friends and family.
While we can’t help you lose weight or with any of the above specifically, we can help with another common intention. If your New Year’s resolution is to get on top of your finances, we have come up with few tips to help you do just that.
TIP #1 – DO A BUDGET
Allocate some time to going through your finances. Look at where your money is going. This is now easier than ever with internet banking. Most providers give you the ability to view your overall spending. Breaking things down into categories such as groceries, transport and health, just to name a few. Keep an eye on the discretionary spending areas such as shopping, home, eating out and entertainment. Do you really need to go to Kmart this weekend? Or Bunnings to buy yet another spare Ryobi battery on the chance the lawn mower, chainsaw and blower vac all go flat at the same time?
TIP #2 – CUT DOWN ON TAKE-AWAY
Well this tip might actually be us helping you with the lose weight resolution. Being time poor is a frustrating part of being an adult. However, being organised doesn’t just come down to which particular Zodiac sign you belong to. Do some meal preparation on the weekends or in the least, plan the week ahead and get all of the dinner ingredients when doing the groceries.
TIP #3 – SEEK OUT A 0% INTEREST CREDIT CARD
Statistics from ASIC’s Money Smart Guide estimate that the average credit card debt per card holder is just over $4100.
For any existing debt, seek out and transfer the balance to a 0% interest rate credit card. There are plenty out there. Just make sure you set yourself up to pay it off within the 0% interest period. Cut up the old credit card or if you really need to keep it, reduce the limit.
TIP #4 – START A SAVINGS PLAN
Statistics from ASIC’s Money Smart Guide also suggest that 43% of Australian’s don’t have a clear financial plan.
When starting a savings plan it needs to be achievable. Even starting with something as simple as saving $1 for every week of the year. $1 in the first week, $2 in the second, $3 in the third and so on. If you did this for the entire year with $52 being the amount deposited in the final week, you will have saved $1300. Plus any interest. You will earn more interest starting with $52 in the first week, $51 in the second and so on.
TIP #5 – IF YOU HAVE A MORTGAGE, GET AN OFFSET ACCOUNT
If you don’t already have one. Putting your money into an offset account can cut years off your mortgage and save you tens of thousands of dollars. An offset account allows you the flexibility of having savings as well as using it to reduce the amount of interest you are paying on the balance of your mortgage. Instead of earning interest on that savings.
So there you have it. We wish you all the best in 2018 and hope that you successfully achieve any resolutions you challenge yourself to.
Want a more personalised approach to your financial plan? We can be there to assist you throughout your financial journey. We will help you set clear goals and implement a plan to achieve them in all stages of life.